Rental market disruption

The rental markets across Australia have been widely impacted by the Coronavirus pandemic .

Rent MoveIn the current crisis, the rental market has been more heavily affected than the buyers’ market, with a combination of falling demand and rising supply.

However, as with property values and transactions, Australia does not have a ‘single’ rental market.

Australia has a collection of thousands of different rental markets with variations in demographic and workforce compositions, levels of supply and price points.

A recently released report by ANZ Bank and Corelogic report highlighted some of the ways that COVID-19 has affected the different parts of the Australian rental market.

The ANZ report explains that people who work in the hospitality sector, where job and income losses have been the deepest, have a much higher likelihood of renting than owning homes.

And while there has been a formal program to defer mortgage payments, relief for renters has been much less defined.

Rental market conditions will ultimately drive investor behaviour.

Many Australians choose to save through investment in housing.

The fluctuations in the rental market will directly influence investor demand over the next few years and flow through to both prices and construction – and in turn measures of housing affordability.

Already weak rental market

The ANZ / Corelogic report explains that one of the most impacted sectors of the housing market in the wake of COVID-19 has been the rental market.

Due to a mixture of negative demand and supply shocks, rental market conditions weakened over April and May.

This came off the back of an already ‘weak’ rental environment, where annualised growth in rents has been subdued at 0.9 per cent across the capital city markets for the past five years.

COVID-19 has uniquely impacted demand for rental accommodation.

Demand for rental properties fell with the onset of the pandemic, which is reflected in both rental prices and rental listings.

This was likely most attributable to:

  • A disproportionate loss of income in industry sectors where workers were more likely to be renting; and
  • The closure of Australian borders to international travellers and migrants, who tend to rent when they first arrive rather than buy.

However, as with property values and transactions, Australia does not have a ‘single’ rental market. Australia has a collection of thousands of different rental markets with variations in demographic and workforce compositions, levels of supply and price points.

Before the onset of the pandemic in Australia, investor participation in the housing market was at its lowest since 2001. Investor finance fell sharply over April due to high levels of uncertainty.

If sustained, this suggests the decline in demand for rentals could be partially offset by a decline in the supply of rental property.

Though as with many housing market and economic indicators, rental market conditions eased from April to May.

There are mixed opportunities for landlords and tenants across Australia, depending on where they are located. For tenants, inner-city areas of Sydney and Melbourne present the greatest opportunity for negotiating a reduction in rent.

Rent For landlords, these same areas pose greater short-term risk.

Rental affordability already showed signs of deteriorating in four of the eight capital city markets over the year to March 2020. Affordability may deteriorate further in the coming quarters due to job and income loss.

For renters who are less affected, or unaffected by the COVID-19 downturn, affordability may improve markedly, depending on the region in which they are located.

Ultimately, the opportunity to secure lower rents is unequal across industry and location.

Rental growth has broadly tracked below inflation and income growth and rental affordability has held quite firm across the capital cities.

However, for relatively unaffordable markets like Hobart, broad-based affordability measures should be considered for longer term improvements in affordability, rather than relying a global pandemic to reduce demand.

Lasting impact

Housing affordability will remain a key focus for policy makers, with the COVID-19 crisis only exacerbating the challenges facing governments.

The pandemic and its associated economic shock will have long lasting impacts on housing affordability.

The financial impact has not been evenly felt and the stimulus measures designed to offset it will have varying impacts of their own.

Overlaying these issues is the persistent problem of low income growth which will continue to be a challenge for policy makers.

Author of the report: Felicity Emmett is Senior Economist at ANZ and Eliza Owen is Head of Australian Research at CoreLogic

Click here to read the full ANZ CoreLogic Housing Affordability report.

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on


If you’re wondering what will happen to property in 2020–2021 you are not alone.

You can trust the team at Metropole to provide you with direction, guidance and results.

In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.

If you’re looking at buying your next home or investment property here’s 4 ways we can help you:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results and more certainty. Click here to learn more
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
  3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
  4. Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.


Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.


Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.

Leanne Jopson


Leanne is National Director of Property Management at Metropole and a Property Professional in every sense of the word. With 20 years' experience in real estate, Leanne brings a wealth of knowledge and experience to maximise returns and minimise stress for their clients. Visit:

'Rental market disruption' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.


Copyright © Michael Yardney’s Property Investment Update Important Information
Content Marketing by GridConcepts